(Bloomberg News circulated the following article by Rip Watson on October 13.)
WASHINGTON — Canadian National Railway Co., the nation’s biggest railroad, is challenging an arbitrator’s rate ruling in favor of customer Western Canadian Coal Corp., saying the process is biased.
The railroad is asking the Federal Court of Canada to review the arbitration system and overturn the Sept. 6 ruling, spokesman Mark Hallman said today. The Vancouver-based coal company said its transportation costs may rise 6 percent if Canadian National prevails, without giving a dollar figure. Western Canadian Coal called the challenge “without merit.”
“There is a larger issue beyond the arbitration ruling,” Hallman said. “The process is biased against the carrier. There are no criteria to guide the arbitrator in the selection of the offer and no requirement for the arbitrator to provide reasons for his or her decision.”
Canadian National’s action comes after Canadian Pacific Railway Ltd. in April settled a rate dispute with Elk Valley Coal Partnership, a coal-mining venture in which Teck Cominco Ltd. is the majority owner. That case also was arbitrated.
Shares of Montreal-based Canadian National fell 38 cents to C$83.66 at 10:54 a.m. in Toronto Stock Exchange trading. Western Canadian Coal declined 8 cents to C$4.31.